For many Americans, the word
chocolate
makes them think of Hershey's. Milton Hershey, the founder of the
Hershey Foods Corporation, made his first milk chocolate bar an affordable
treat customers could buy almost anywhere. Today, Hershey's
chocolate comes in all forms, from bite-size "kisses" to
chocolate syrup and chocolate milk. Hershey Foods, however, is more than
just chocolate. By purchasing other companies Hershey expanded and now
sells gum, licorice, breath mints, and hard candy, with many of its
products marketed around the world. In the Unites States, Hershey has
become the country's leading chocolate and candy maker.

From Caramel to Chocolate

Milton Hershey spent many years trying to succeed in the candy business
before he perfected the milk chocolate bar. As a teenager, he worked with
a confectioner (candy maker) in Lancaster, Pennsylvania, not far from his
hometown of Derry Church. In 1876, Hershey opened his own candy business
in Philadelphia, but that and several other efforts in other cities
failed. Finally, in 1886, he opened the Lancaster Caramel Company, making
the chewy candy with milk, unlike most confectioners of the time.
Hershey's "Crystal A" caramels were an immediate hit.

For some of his caramels, Hershey added a bit of cocoa powder, which came
from the same beans used to make cocoa butter, the main ingredient in
chocolate. In 1893, Hershey watched a German manufacturer of
chocolate-making equipment produce chocolate bars. He bought the same
machinery for his company to make chocolate coatings for his caramels.
Soon, however, he decided to sell chocolate and cocoa as separate
products. The next year, the Hershey Chocolate Company started as a
division of the Lancaster Caramel Company.

To sell his new candies, Hershey hired William Murrie. To advertise the
products, he bought an electric car—one of the first in
Pennsylvania—and painted "Hershey's Cocoa" on
each side. Hershey not only made plain bars, he also molded his chocolate
to look like cigars, miniature bicycles, and many other items. By 1900, he
decided to get out of the caramel business and devote himself to
chocolate. Hershey sold the Lancaster Caramel Company for $1 million and
kept the Hershey Chocolate Company. He also began plans to build a new
factory.

Chocolate for Everyone

For several years, Hershey made chocolate out of a rented factory while he
looked for the land for his new plant. Finally, he chose a site in Derry
Church. The area had many dairy farms, which was handy since Hershey
needed fresh milk to make his milk chocolate. Adding milk to chocolate
gave it a light color and smooth taste. The process had been
discovered in Europe in 1875, but Hershey spent several years developing
his own recipe for milk chocolate. When his factory opened in 1905,
Hershey concentrated on selling chocolate bars at five cents each.

At the time, most Americans had never tasted either milk or dark
chocolate. Chocolate was expensive and sold only at candy shops or in
drugstores. Hershey believed everyone should be able to afford chocolate,
and they should be able to buy it anywhere. Joël Glenn Brenner,
author of
The Emperors of Chocolate,
quotes Hershey as saying, "It is more than a sweet, it is a
food." By producing huge numbers of chocolate bars, Hershey kept
his prices low. He also convinced grocery stores, newsstands, diners, and
other businesses to carry his bars. Then, unlike most chocolate makers,
Hershey sold his bars across the United States, not just in one region.

Timeline

1894:

Candy maker Milton Hershey sells his first milk chocolate bars.

1905:

The Hershey Chocolate Company opens its first factory in the town of
Hershey, Pennsylvania.

1918:

Milton Hershey donates most of his wealth to the trust that runs the
Hershey Industrial School for orphaned boys.

1931:

Annual sales at Hershey reach $31 million.

1945:

Milton Hershey dies.

1963:

Hershey buys the H. B. Reese Candy Company.

1968:

Hershey changes its name to the Hershey Foods Corporation.

1970:

Hershey runs national advertising for the first time.

1988:

Hershey buys Peter Paul/Cadbury candies.

2001:

Hershey announces record quarterly sales.

Directly around his plant Hershey built a new town, with homes for his
workers. The town of Hershey grew to include a school, stores, an
amusement park, and a zoo. Hershey
provided the heat, water, and electricity to the town's residents,
and no one paid taxes. In 1909, Hershey and his wife Catherine opened the
Hershey Industrial School, which educated orphaned boys. With his town and
school, Hershey became known as one of America's most generous
businessmen.

The success of Hershey's chocolate bars fed that generosity. So did
a new product introduced in 1907: Hershey's Kisses. By 1911, annual
sales at the company reached $5 million. Hershey was not involved in most
daily operations, leaving that to Murrie, his first salesman and close
friend. After November 1918, Hershey did not even own the company bearing
his name. When his wife died, he gave his estate to the Hershey Trust,
which had been set up to run the Industrial School. The Hershey Company
sold shares to the public starting in 1927, but the trust remained the
principal owner.

More Products, New Companies

The Hershey company introduced several new chocolate candies during the
1920s and 1930s. First was Mr. Goodbar in 1925, a chocolate bar with
peanuts. Krackel, chocolate and crisped rice, hit store shelves in 1938,
and Hershey Miniatures appeared the next year. The company also provided
the raw chocolate used by other confectioners for their candies. Sales
grew even as the United States struggled through the Great Depression of
the 1930s, the economic downturn that threw millions of people out of work
and left many hungry and homeless.

When it opened in 1905, the Hershey plant was the most modern candy
factory in the world. By 1915, the company was producing more than
100,000 pounds of chocolate every day. The plant remains the
world's largest chocolate factory.

The Depression stirred some industrial workers who did have jobs to form
unions. The unions tried to win higher pay and better working conditions
for workers. Strikes and violence broke out at some factories, including
Hershey's. Workers closed the plant and demanded the company let
them join a national union. The strike ended several days later when area
dairy farmers, angered because they were losing money as the factory sat
idle, attacked the strikers. Hershey eventually agreed to let the workers
unionize.

Chocolate goes through many different stages of processing before it
is packaged and sold.

Reproduced by permission of Corbis Corporation (Bellevue).

More changes followed in the 1940s. Hershey died in 1945, and Murrie
retired two years later. By then, the Hershey Chocolate Company controlled
90 percent of the milk chocolate market in the United States. During the
1950s, however, the company seemed to lack direction. Competition
increased, and companies in Europe were streamlining their production with
new equipment. Hershey also did not advertise, following the long-held
belief of Milton Hershey: "Quality is the best kind of
advertising."

The company finally began to modernize in the early 1960s, under the
leadership of Samuel Hinkle. Hinkle added new equipment to speed up
production and opened Hershey's first foreign plant in Canada. In
1963, Hershey grew with its purchase of the H. B. Reese Candy Company,
famous for its chocolate-and-peanut butter cups. The company also moved
beyond candy in 1966, with the purchase of pasta makers San Giorgio and
Delmonico Foods. To reflect its new products, the company changed its name
in 1968 to Hershey Foods Corporation. Two years later, Hershey advertised
for the first time, placing ads in newspapers and broadcasting ads
nationally on radio and television.

Rivalry with Mars

The advertising was a response to Hershey's slipping sales,
primarily to its major U.S. competitor, Mars, Inc. Advertising and
marketing increased under William Dearden, who took over as chief
executive officer (CEO) in 1976. Dearden also continued to move the
company beyond chocolate manufacturing. By 1979, Hershey had bought
several more pasta companies, the largest U.S. licorice manufacturer, and
Friendly's, a
chain of family restaurants that specialized in ice cream. (Hershey sold
Friendly's in 1988). By 1982, about 30 percent of Hershey's
$1.5 billion in sales came from non-candy products.

Hershey's Miniatures, first made and sold in 1939, have been
popular ever since.

Reproduced by permission of AP/Wide World Photos.

In 1982, Hershey Foods scored a major victory in its chocolate
"war" with Mars. The competitor turned down a chance to have
its M&M candies featured in a new movie by director
Steven Spielberg
(see
Dreamworks SKG
entry). Hershey's, however, jumped at the opportunity to promote a
relatively new product, Reese's Pieces. The movie was
E.T: The Extra-Terrestrial,
which became one of the most popular films ever. One Hershey executive
said in
The Emperors of Chocolate,
"It was the biggest marketing coup in history.… We got
immediate recognition for our product, the kind of recognition we would
normally have to pay fifteen or twenty million bucks for."

The success of Reese's Pieces and several other new products, plus
the 1988 purchase of the U.S. interests of British candy maker Cadbury
Schweppes PLC, helped Hershey regain its spot as the top American candy
company. Hershey also expanded its presence in Europe, buying a plant from
a German company in 1991.

Fighting to Stay on Top

Since the early 1990s, Hershey has continued to battle Mars for the top
spot in chocolate manufacturing. It has introduced successful new
products, such as Hershey's Hugs (Kisses made from white chocolate)
and Reese's NutRageous bar. The company has also bought other candy
companies, including Leaf North America, the maker of Jolly Rancher hard
candies. And Hershey's has sometimes worked with other companies to
market products with the Hershey name.

In 2001, an economic downturn hurt sales in many industries. Hershey,
however, announced record sales in the third quarter of that year, a
little more than $1.3 billion. Still, the company announced job layoffs
and the closing of several plants. Hershey's and other chocolate
makers also faced bad publicity that year. Several newspapers reported
that some of the raw cocoa used to make chocolate is picked and processed
by children held as slaves on farms in several African nations. In
November 2001, Hershey and other U.S. chocolate companies announced they
would start a program to eliminate the abuses.

Hershey Goes to War

During World War II (1939-45), Hershey played an important role in
giving U.S. soldiers the energy they needed on the battlefield. After
World War I (1914-18), the company worked with U.S. officials to design
a chocolate-based bar loaded with nutrition and calories. The end result
was the Field Ration D, a bar that mixed oat flour and vitamins with
chocolate. Unlike regular chocolate, the new bar would stay solid at up
to 120 degrees Fahrenheit, and inside its special packaging it stayed
dry for up to an hour when placed in water. Hershey's made more
than one billion of these rations, and U.S. soldiers carried the Hershey
name all over the world. The military continued to use the Field Ration
D until the 1970s.

Hershey chocolate went to war again in 1990, as U.S. soldiers prepared
to fight in the Persian Gulf War (1991). Hershey developed a chocolate
bar that would stay solid at temperatures up to 140 degrees
Fahrenheit—perfect for the hot desert climate of the Persian Gulf
area. Unlike the World War II bars, however, these "Desert
Bars" tasted just like a regular Hershey bar. The company sent
almost a million Desert Bars overseas and also sold them at home.

Despite its problems, the Hershey Foods Corporation remains on top in the
chocolate and candy industry. It continues to expand its efforts overseas
and roll out new products designed to tempt the sweet tooth of candy
buyers everywhere.

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User Contributions:

I love chocolate, but have been forced to stop buying most of your products. I'm very soy intolerant. Unfortunately, you're adding soy, in one form or another, to almost everything. More people than you know have difficulties with soy. Please remove it! I miss all the things I used to eat.

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